Comparative Study of the Economic and Financial Impacts of Water and Wastewater Pricing in Japan and Iran

Applying the best practices of other institutions and countries leads to a deeper management outlook. Compared with other goods, the pricing of water, which depends on the nature and the special conditions governing the sector, is more sensitive. This has led to various countries opting for different methods for setting water tariffs. Given the importance of the different methods of water pricing and their economic and financial consequences and since to date no research has been undertaken on the subject in this country, this research has tried to analyze and study the economic and financial impacts of water and wastewater pricing in Japan compared to Iran. The data in this article is extracted from translating and summarizing reports published by the Japan Water Association, field visits to several Japanese companies, and the accumulative reports of the Iranian water and wastewater industry during the time of 2012–2015. Time series, cross section analysis, and comparative studies are applied to analyze the economic and financial parameters of the Japanese and Iranian water and wastewater industry. The results indicate that the strength of the Japanese water and wastewater industry has a very high cash flow, low risks, creation of economic value-added, profitability, high efficiency, etc. due to an economic approach in pricing versus the average cost pricing approach taken in Iran.